Crucial Effect of Britain on Indian Society

'Crucial Effect of Britain on Indian society'

As we know that the English ruled over India for two hundred years with the hands of cruelty. The major difference between the British colonists in India and earlier invaders was that none of the earlier invaders made any structural changes in Indian economy.British rule in India caused a transformation of India’s economy into a colonial economy, the structure and operation of Indian economy were determined by the interests of the British economy.Ruin of Artisans and Handicraftsmen,Cheap and machine-made imports flooded the Indian market  and also the base of Indian society after the Charter Act of 1813 allowing one-way free trade for the British citizens. On the other hand, Indian products found it more and more difficult to penetrate the European markets or in British society.After 1820, European markets were virtually closed to Indian exports. The newly introduced rail network helped the European products to reach the remotest corners of the country.The loss of traditional livelihood was not accompanied by a process of industrialisation in Indian society, had happened in other rapidly industrialising countries of the time. This resulted in deindustrialisation of India at a time when Europe was witnessing a re-intensified Industrial Revolution. It happened at a time when Indian artisans and handi-craftsmen were already feeling the crunch due to loss of patronage by princes and the nobility, who were now under the influence of new western tastes and values.Another feature of deindustrialisation was the decline of many cities,society, culture, literature and a process of ruralisation of India. Many artisans, faced with diminishing returns and repressive policies in Bengal during the Company’s rule and artisans were paid low wages and forced to sell their products at low prices, abandoned their professions, moved to villages and took to agriculture.This resulted in increased pressure on land. An overburdened agriculture sector was a major cause of poverty during British rule and this upset the village economic conditions.From being a net exporter, India became a net importer.

                                   The Government, only interested in maximisation of rents and in securing its share of revenue, had enforced the Permanent Settlement system in large parts. Transferability of land was one feature of the new settlement which caused a great insecurity to the tenants who lost all their traditional rights in land.

                          There  was an important development in the second half of the nineteenth century was the establishment of large-scale machine-based industries in Indian society. The machine age in India began when cotton textile, jute and coal-mining industries were started in 1850. The first textile mill was started in Bombay by Cowasjee Nanabhoy in 1853, and the first jute mill in Bengal in 1855.

These industries expanded slowly but continuously. In 1879 there were 56 cotton textile mills in India employing nearly 43,000 persons. In 1882 there were 20 jute mills, most of them in Bengal, employing nearly 20,000 people. In 1905, India had 206 cotton mills employing nearly 196,000 people. In 1901,there were over 36 jute mills employing nearly 115,000 people. The coal-mining industry employed nearly one lakh of persons in 1906.Other mechanical industries which developed during the second half of the nineteenth and the beginning of the twentieth centuries were cotton gins and presses, rice, flour and timber mills, leather tanneries, woolen textiles, sugar mills, iron and steel works, and such mineral industries as salt, mica and saltpeter,Cement, paper, matches, sugar and glass industries developed during 1930. But all these industries had a very stunted growth.Most of the modern Indian industries were owned or controlled by British capital. Foreign capitalists were attracted to Indian industry by the prospect of high profit. Labour was extremely cheap; raw materials were readily and cheaply available; and for many goods, India and its neighbours provided a ready market. For many Indian products, as tea, jute and manganese, there was a ready demand the world over.

On the other hand, profitable investment opportunities at home were getting fewer. At the same time, the colonial government and officials were willing to provide all help and show all favours. Foreign capital easily overwhelmed Indian capital in many of the industries.Only in the cotton textile industry did Indians have a large share from the beginning, and in the 1930s, the sugar industry was developed by Indians. Indian capitalist also had been struggling from the beginning against the power of British managing agencies and British banks and British society.

                    Then Indian businessmen had to bend before British managing agencies dominating that field. In many cases even Indian-owned companies were controlled by foreign-owned or controlled managing agencies of Britain.Indians also found it difficult to get credit from banks, most of which were dominated by British financiers. Even when they could get loans they had to pay high interest rates while foreigners could borrow on much easier terms.Of course, gradually Indians began to develop their own banks and insurance companies. In 1914, foreign banks held over 70 percent of all bank deposits of India; by 1937, their share had decreased to 57 percent.British enterprises in India also took advantage of their close connection with British suppliers of machinery and equipment, shipping, insurance companies, marketing agencies, government officials,cultural, lyrical and political leaders to maintain their dominant position in Indian economic status. Moreover, the government followed a conscious policy of favouring foreign capital as against Indian capital.The railway policy of the government also discriminated against Indian enterprise; railway freight rates encouraged foreign imports at the cost of trade in domestic products. It was more difficult to distribute Indian goods than to distribute imported goods.Another serious weakness of Indian industrial effort was the almost complete absence of heavy or capital goods industries, without which there can be no rapid and independent development of industries in India. India had no big plants to produce iron and steel, or to manufacture machinery.A few petty repair workshops represented engineering industries and. The first steel in India was produced only in 1913. Thus India lacked such basic industries as steel, metallurgy, machine, chemical and oil. India also lagged behind in the develop­ment of electric power.

                     

  Apart from machine-based industries, the nineteenth century also witnessed the growth of plantation industries such as indigo, tea and coffee and other plants. They were almost exclusively European in ownership. Indigo was used as a dye in textile manufacture. Indigo manufacture was introduced into India at the end of the eighteenth century and flourished in Bengal and Bihar similarly.Indigo planters gained notoriety for their oppression over the peasants who were compelled by them to cultivate indigo. This oppression was vividly portrayed by the famous Bengali writer , in his play Neel Darpan in 1860. The invention of a synthetic dye gave a big blow to the indigo industry and it gradually declined.The tea industry developed in Assam, Bengal, south India and the hills of Himachal Pradesh after late eighteenth century. Being foreign-owned, it was helped by the government with grants of rent-free land and other facilities. In time, the use of tea spread all over India and it also became an important item of export. Coffee plantations developed during this period in south India.The plantation and other foreign industries were hardly any advantage to the Indian people. Their profits went out of the country. A large part of their salary was spent on highly paid foreign staffs. They purchased most of their equipments  in abroad. Most of their technical staffs was foreign. Most of their products were sold in foreign markets and the foreign exchange so earned was utilised by Britain. The only advantage that Indians got out of these industries was the creation of unskilled jobs. Most of the workers in these enter­prises were extremely low paid, and they worked under extremely harsh conditions for very long hours. Moreover, conditions of near-slavery prevailed in the plantations.

              The industrial progress in India was exceedingly slow and painful. It was mostly confined to cotton and jute industries and tea plantations in the nineteenth century, and to sugar and cement in the 1930s.As late as 1946, cotton and jute textiles accounted for 40 percent of all workers employed in factories. In terms of production as well as employment, the modern industrial development of India was paltry compared with the economic development of other countries or those with India’s economic needs.It did not, in fact, compensate even for the displacement of the indigenous handicrafts; it had little effect on the problems of poverty and overcrowding of land. The paltriness of Indian industrialization is brought out by the fact that out of a population of 357 million in 1951 only about 2.3 million were employed in modern industrial enterprises. Moreover, the decay and decline of the urban and rural handicraft industries continued unabated after 1858. The Indian Planning Commission has calculated that the number of persons engaged in processing and manufacturing fell from 10.3 million in 1901 to 8.8 million in 1951,even though the population increased by nearly 40 percent.The government made no effort to protect, rehabilitate, reorganize and modernize these old indigenous industries.Moreover, even the modern industries had to develop without government help and often in opposition to British policy. British manufacturers looked upon Indian textile and other industries as their rivals and put pressure on the Government of India not to encourage but rather to actively discourage industrial development in India. Thus British policy artificially restricted and slowed down the growth of Indian industries.Furthermore, Indian industries, still in a period of infancy, needed protection. They developed at a time when Britain, France, Germany and the United States had already established powerful industries and could not therefore compete with them.In fact, all other countries, including Britain, had protected their infant industries by imposing heavy customs duties on the import of foreign manufacturers. But India was not a free country.Its policies were determined in Britain and in the interests of British industrialists who forced a policy of Free Trade upon their colony. For the same reason the Government of India refused to give any financial or other help to the newly founded Indian industries as was being done at the time by the governments of Europe and Japan for their own infant industries.It would not even make adequate arrangements for technical education which remained extremely backward until 1951 and further contri­buted to industrial backwardness. In 1939 there were only 7 engineering colleges with 2217 students in the country.Many Indian projects, for example, those concerning the construction of ships, locomotives, cars and aeroplanes, could not get started because of the government’s refusal to give any help.

Finally, in the 1920s and 1930s under the pressure of the rising nationalist movement and the Indian capitalist class, the Government of India was forced to grant some tariff protection to Indian industries. But, once again, the government discriminated against Indian-owned industries.The Indian-owned industries such as cement, iron and steel, and glass were denied protection or given inadequate protection. On the other hand, foreign dominated industries, such as the match industry, were given the protection they desired. Moreover, British imports were given special privileges under the system of ‘imperial preferences’ even though Indians protested vehemently.Another feature of Indian industrial development was that it was extremely lopsided regionally. Indian industries were concentrated only in a few regions and cities of the country. Large parts of the country remained totally underdeveloped.This unequal regional economic development not only led to wide regional disparities in income but also affected the level of national integration. It made the task of creating a unified Indian nation more difficult.An important social consequence of even the limited industrial development of the country was the birth and growth of two new social classes in Indian society,the industrial capitalist class and the modern working class. These two classes were entirely new in Indian history because modern mines, industries and means of transport were new.

                              Even these classes formed a very small part of the Indian population, they represented new technology, a new system of economic organisation, new social relations, new ideas and a new outlook. They were not weighed down by the burden of old traditions, customs and styles of life.Most of all, they possessed an all-India outlook. Moreover, both of these new classes were vitally interested in the industrial development of the country. Their economic and political importance and roles were, therefore, out of all proportion to their numbers.There is a major characteristic of British rule in India and the net result of British economic policies, was the prevalence of extreme poverty among its people. While historians disagree on the question whether India was getting poorer or not under British rule, there is no disagree­ment on the fact that throughout the period of British rule most Indians always lived on the verge of starvation.As time passed, they found it more and more difficult to find employment or make a living. British economic exploitation, the decay of indigenous industries, the failure of modern industries to replace them, high taxation, the drain of wealth to Britain and a backward agrarian structure leading to the stagnation of agriculture and the exploitation of the poor peasants by the zamindars, landlords, princes, moneylenders, merchants and the state gradually reduced the Indian people to extreme poverty and prevented them from progressing. India’s colonial economy stagnated at a low economic level.

The poverty of the people found its culmination in a series of famines which ravaged all parts of India in the second half of the nineteenth century. The first of these famines occurred in western Uttar Pradesh in 1860-61 and cost over 2 lakhs of lives. In 1865-66 a famine engulfed Orissa, Bengal, Bihar and Madras and took a toll of nearly 20 lakhs of lives, Orissa alone losing 10 lakh people.More than 14 lakhs of people died in the famine of 1868-70 in western Uttar Pradesh, Bombay and Punjab. Many states in Rajputana, another affected area, lost one-fourth to one-third of their population.

Perhaps the worst famine in Indian history till then occurred in 1876 to 78 in Madras, Mysore, Hyderabad, Maharashtra, western Uttar Pradesh, and Punjab. Maharashtra lost 8 lakh people, Madras nearly 35 lakh. Mysore lost nearly 20 percent of its population and Uttar Pradesh over 12 lakh.Drought led to a country-wide famine in 1896-97 which affected over 9.5 crores of people of whom nearly 45 lakh died. The famine of 1899-1900 followed quickly and caused widespread distress. In spite of official efforts to save lives through provision of famine relief, over 25 lakhs of people died.Apart from these major famines, many other local famines and scarcities occurred. William Digby, a British writer, has calculated that all over 28,825,000 people died during famines from 1854 to 1901. Another famine in 1943 carried away nearly three million people in Bengal. These famines and the high losses of life caused by them indicate the extent to which poverty and starvation had taken root in India.Many English officials in India recognised the grim reality of India’s poverty during the nineteenth century.William Hunter, the compiler of the Imperial Gazetteer, conceded that “forty million of the people of India habitually go through life on insufficient food.” The situation became still worse in the twentieth century. The quantity of food available to an Indian declined by as much as 29 per cent in the 30 years between 1911 and 1941.There were many other indications of India’s economic backwardness and impoverishment. Colin Clark, a famous authority on national income, has calculated that during the period 1925-34, India and China had the lowest per capita incomes in the world. The income of an Englishman was five times that of an Indian.Similarly, the average life expectancy of an Indian during the 1930s was only 32 years in spite of the tremendous progress that modern medical sciences and sanitation had made. In most of the West European and North American countries, the average age was already over 60 years.India’s economic backwardness and poverty were not due to the niggardliness of nature. They were man-made. The natural resources of India were abundant and capable of yielding, if properly utilised, a high degree of prosperity to the people.But, as a result of foreign rule and exploitation, and of a backward agrarian and industrial economic structure in fact as the total outcome of its historical and social development in India, presented the paradox of the poor people living in a rich country.The poverty of India was not a product of its geography or of the lack of natural resources or of some ‘inherent’ defect in the character and capabilities of the people. Nor was it a remnant of the Mughal period or of the pre-British past.It was mainly a product of the history of the last two centuries. Before that, India was no more backward than the countries of Western Europe. Nor were the differences in standards of living at the time very wide among the countries of the world. Precisely during the period that the countries of the West developed and prospered, India was subjected to modern colonialism and was prevented from developing.

                                          All the developed countries of today developed almost over entire period during which India was ruled by Britain, most of them doing so after 1850. Till 1750 the differences in living standards were not wide between the different parts of the world. It is interesting, in this connection, to note that the dates of the beginnings of the Industrial Revolution in Britain and the British conquest of Bengal virtually coincide!

The basic fact is that the same social, political and economic processes that produced industrial development and social and cultural progress in Britain also produced and then maintained economic underdevelopment and social and cultural backwardness in India.

The reason for this is obvious. Britain subordinated the Indian economy to its own economy and determined the basic social trends in India according to her own needs.

The result was stagnation of India’s agriculture and industries, exploitation of its peasants and workers by the zamindars, landlords, princes, moneylenders, merchants, capitalists and the foreign government and its officials, and the spread of poverty, disease and semi-starvation.

                     On another way,There was little spending by Government on improvement of land productivity. The Zamindars, with increased powers, resorted to summary evictions, demanded illegal dues and ‘beggar’ to maximise their share in the produce and, as such, had no incentive to invest for improvement of agriculture.The overburdened peasants had to approach the money-lenders to be able to pay their dues to the Zamindars. The money­lender, who was often also the village grain-merchant, forced the Indian farmer to sell the produce at low prices to clear his dues.The powerful money-lender was also able to manipulate the judiciary and law in his favour.The peasant turned out to be the ultimate sufferer under the triple burden of the Government, zamindar and money­lender. His hardship increased at the time of famine and scarcity. This was as much true for the Zamindari areas as for areas under Ryotwari and Mahalwari systems.Emergence of New Land Relations, falling down of Zamindars:

By 1815, half the total land in Bengal had passed into new hands. The new Zamindars, with increased powers but with little or no avenues for new investments, resorted to land grabbing and sub-infeudation. Increase in number of intermediaries to be paid gave rise to absentee landlordism and increased the burden on the peasant.Since the demand for land was high, prices went up and so did the liabilities of the peasant. With no traditional or benevolent ties with the tenants, the zamindar had no incentive to invest in the improvement of agriculture. The interests of the Zamindars lay only in the perpetuation of British rule and in opposing the national movement.

                                           The cultivator had neither the means nor any incentive to invest in agriculture India. The zamindar had no roots in the villages, while the Government spent little on agricultural, technical or mass education. All this, together with fragmentation of land due to sub-infeudation, made it difficult to introduce modern technology which caused a perpetually low level of productivity.

Commercialisation of Indian Agriculture:

In the latter half of the nineteenth century, another significant trend was the emergence of the commercialisation of agriculture. So far, agriculture was a way of life rather than a business enterprise.Now agriculture began to be influenced by commercial considerations. Certain specialised crops began to be grown not for consumption in the village but for sale in the national and even international markets.

‘Commercial crops like cotton, jute, groundnut, oilseeds, sugarcane, tobacco, etc were more remunerative than food grains. Again, the cultivation of crops like condiments, spices, fruits and vegetables could cater to a wider market.Perhaps, the commercialisation trend reached the highest level of development in the plantation sector, in tea, coffee, rubber, indigo, etc,that was mostly owned by Europeans and the produce was for sale in a wider market.The new market trend of commercialisation and specialisation was encouraged by many factors and replacement of custom and tradition by competition and contract emergence of a unified national market, growth of internal trade, improvement in communications through rail and roads and boost to international trade given by entry of British finance capital,etc.For the Indian peasant, commercialisation seemed a forced process.There was hardly any surplus for him to invest in commercial crops, given the subsistence level at which he lived, while commercialisation linked Indian agriculture with international market trends and their fluctuations.For example, the cotton of the 1860s pushed up prices but this mostly benefited the intermediaries, and when the slump in prices came in 1866, it hit the cultivators the most, bringing in its turn heavy indebtedness, famine and agrarian riots in the Deccan in the 1870s. Thus, the cultivator hardly emerged better from the new commercialisation trend in Indian society. 

                                            It was only in the second half of the nineteenth century that modern machine-based industries started coming up in India. The first cotton textile mill was set up in 1853 in Bombay by Cowasjee Nanabhoy and the first jute mill came up in 1855 in Rishra (Bengal). But most of the modern industries were foreign-owned and controlled by British managing agencies.

There was a rush of foreign capital in India at this time due to prospects of high profits, availability of cheap labour, cheap and readily available raw material, ready market in India and the neighbours, diminishing avenues for investments at home, willingness of the administration to provide help to all, and ready markets abroad for some Indian exports such as tea, jute and manganese.Indian-owned industries came up in cotton textiles and jute in the nineteenth century and in sugar, cement, etc in the twentieth century. Indian-owned industries suffered from many handicrafts credit problems, no tariff protection by Government, unequal competition from foreign companies, and stiff opposition from British capitalist interests who were backed by sound financial and technical infrastructure at home.The colonial factor also caused certain structural and institutional changes. The industrial development was characterised by a lopsided pattern—core and heavy industries and power generation were neglected and some regions were favoured more than others—causing regional disparities.These regional disparities hampered the process of nation- building. In the absence of careful nurturing of technical education, the industry lacked sufficient technical manpower. Socially, the rise of an industrial capitalist class and the working class was an important feature of this phase.Indian traders, moneylenders and bankers had amassed some wealth as junior partners of English merchant capitalists in India. Their role fitted in the British scheme of colonial exploitation. The Indian moneylender provided loans to hard-pressed agriculturists and thus facilitated the state collection of revenue.

               The Indian trader carried imported British products to the remotest corners and helped in the movement of Indian agricultural products for exports. The indigenous bankers helped both in the process of distribution and collection but the colonial situation retarded the development of a healthy and independent industrial bourgeoisie, and its development was different from other independent countries like Germany and Japan.

                                      The term ‘economic drain’ refers to a portion of the national product of India which was not available for consumption of its people but was being drained away to Britain for political reasons and India was not getting adequate economic or material returns for it.The drain theory was put forward by Dadabhai Naoroji in his book Poverty and Un British Rule in India. The major components of this drain were salaries and pensions of civil and military officials, interests on loans taken by the Indian Government from abroad, profits on foreign investment in India, stores purchased in Britain for civil and military departments, payments to be made for shipping, banking and insurance services which stunted the growth of Indian enterprise in these services.

The drain of wealth checked and retarded capital formation in India while the same portion of wealth acce­lerated the growth of British economy. The surplus from British economy re-entered India as finance capital, further draining India of its wealth. This had a large effect on income and employment potential within India.Another issues on regular recurrence of famines became a common feature of daily existence in India. These famines were not just food grain scarcity-based phenomena, but were a direct result of poverty unleashed by colonial forces in India. Between 1850 and 1900, about 2.8 crore people died in famines.The early intellectuals of the first half of the nineteenth century supported British rule under the impression that it would modernise the country based on latest technology and capitalist economic organisation. After the 1860s, disillusionment started to set in among the politically conscious and they began to probe into the reality of British rule in India.The foremost among these economic analysts was Dadabhai Naoroji, 'the Grand Old Man of India’, who after a brilliant analysis of the colonial economy put forward the theory of economic drain in Poverty and British Rule in India.Other economic analysts included Justice Mahadeo Govind Ranade, Romesh Chandra Dutt (The Economic History of India), Gopal Krishna Gokhale, G. Subramaniya Iyer.The essence of nineteenth century colonialism, they said, lay in the transformation of India into a supplier of foodstuffs and raw-materials to the metropolis, a market for metropolitan manufacturers and a field for the investment of British capital.

These early nationalist analysts organised intellectual agitations and advocated a complete severance of India’s economic subservience to Britain and the development of an independent economy based on modern industries.The basic assertion of these early intellectuals was that India was poor and growing poorer due to British imperialism, and since the causes of India’s economic backwardness were man-made, they were explainable and removable.The problem of poverty was seen as a problem of raising productive capacity and energy of the people or as a problem of national development, thus making poverty a national issue. This helped in rallying all sections of society around common economic issues. And a development was equated with industrialisation in India . This industrialisation was to be based on Indian and not foreign capital because, according to the early nationalists, foreign capital replaced and suppressed instead of augmenting and encouraging Indian capital.This suppression caused economic drain, further strengthening British hold over India. The political consequences of foreign capital investments were equally harmful as they caused political subjugation and created vested interests which sought security for investors, thus perpetuating the foreign rule.These analysts exposed the force of British arguments that the growth of foreign trade and railways implied development for India. They argued back that the pattern of foreign trade was unfavourable to India. It relegated India to a position of importer of finished goods and exporter of raw materials and foodstuffs.

                       The development of railways, they argued, was not coordinated with India’s industrial needs and it ushered in a commercial rather than an industrial revolution. The net effect of the railways was to enable foreign goods to outsell indigenous products.Further, the benefits from impetus to steel, machinery and capital investment in railways accrued to the British. G.V. Joshi remarked, “Expenditure on railways should be seen as an Indian subsidy to British industries.”The nationalists claimed that one-way free trade was ruining Indian handicrafts industry, exposing it to premature, unequal and unfair competition, while tariff policy was guided by British capitalist interests.On the finance front, taxes were levied to overburden the poor, sparing British capitalists and the bureaucrats. They demanded reduction of land revenue, abolition of salt tax, imposition of income tax and excise duties on consumer goods consumed by the rich middle classes. The government expenditure, it was argued, was meant to serve colonial needs only, while development and welfare were ignored.

The drain theory incorporated all threads of the nationalist critique that it denuded India of its productive capital.According to nationalist estimates, the economic drain at that time, More than the total land revenue,Half the total government revenue or One third of the total savings.The concept of drain that one country taking away wealth from another country that was easily grasped by a nation of peasants for whom exploitation was a matter of daily experience.

           The nationalists agitation on treasury issues served to undermine the ideological hegemony of alien rulers over Indian minds that the foreign rule was in the interest of Indians, thus exposing the myth of its moral foundations.It was also shown clearly that India was poor because it was being ruled for British interests. This agitation was one of the stimulants for intellectual unrest and spread of national consciousness during the moderate phase of freedom struggle from 1875 to 1905,the seed-time of national movement.At  the end of the 19th century, the nationalists had been demanding some share in political power and control over the purse. During the first decade of the 20th century, they started demanding self-rule like United Kingdom or the colonies, and prominent among such nationalists was Dadabhai Naoroji and many others did the same things.